Intra-State purchase tax survives later export where the export is not occasioned by the purchase transaction.

Withdrawal of a rebate under the Orissa Sales Tax Act did not invalidate purchase tax on betel leaves on the ground of double taxation or conflict with Article 286(1)(a), because the levy under section 3-B attached to the intra-State purchase and any later export did not tax the same event twice. Purchases made within Orissa were also not transactions in the course of inter-State trade or export, as the record showed no contract or legal incident requiring movement outside the State at the time of purchase. Subsequent export alone was insufficient to take the transactions outside the State's taxing power, and the purchase tax assessments were upheld.

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Issues: (i) Whether withdrawal of the rebate under the Orissa Sales Tax Act rendered the purchase tax on betel leaves invalid on the ground of double taxation and conflict with Article 286(1)(a) of the Constitution of India; (ii) Whether the petitioners' purchases of betel leaves were transactions in the course of inter-State trade or export so as to be outside the taxing power under the Orissa Sales Tax Act.

Issue (i): Whether withdrawal of the rebate under the Orissa Sales Tax Act rendered the purchase tax on betel leaves invalid on the ground of double taxation and conflict with Article 286(1)(a) of the Constitution of India.

Analysis: The levy under section 3-B of the Orissa Sales Tax Act operated at the point of purchase within the State, while any liability under the Central Sales Tax Act arose only if the later transaction satisfied the statutory requirements of inter-State trade or export. The mere fact that the same goods were later exported did not establish that the same taxable event was being taxed twice. No constitutional or statutory bar was shown against levy of purchase tax on the intra-State purchase merely because the goods were subsequently exported.

Conclusion: The withdrawal of the rebate did not invalidate the purchase tax levy, and the contention of double taxation failed.

Issue (ii): Whether the petitioners' purchases of betel leaves were transactions in the course of inter-State trade or export so as to be outside the taxing power under the Orissa Sales Tax Act.

Analysis: A sale or purchase falls within the course of inter-State trade or export only where the movement of goods is occasioned by the contract of sale or the statutory incidents of that transaction. The record did not show any pre-existing contract requiring the petitioners to move the goods out of Orissa. The petitioners purchased the goods within the State on their own account and later exported a portion of them. Mere subsequent export, without an integral link between the purchase and the movement outside the State, was insufficient to bring the purchase within Article 286(1)(a) or section 3 of the Central Sales Tax Act. The principles governing section 3 and section 5 of the Central Sales Tax Act, and the distinction drawn in prior decisions between factual export and a sale in the course of export, supported this view.

Conclusion: The purchases were intra-State purchases liable to purchase tax under the Orissa Sales Tax Act and were not protected as inter-State or export transactions.

Final Conclusion: The writ petitions failed on all substantial grounds, and the purchase tax assessments were upheld.

Ratio Decidendi: A subsequent export of goods by the purchaser does not by itself convert an earlier intra-State purchase into a sale or purchase in the course of inter-State trade or export unless the movement outside the State is occasioned by the terms or legal incidents of the purchase transaction.

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